Clusters – the geographic concentration of specialized firms that are working in similar or related activities and are interdependent – have played an important role in the industrial development of many countries, including in Europe, the Americas, and Asia. A large part of these successes can be explained by the ability of clusters to build on existing strengths of local communities, such as social capital and abundant labor, to overcome common constraints to economic expansion, such as weak financial markets and institutions. Realizing the potential for cluster-based development and the long history of clusters in the country, the Egyptian Government has made cluster-based industrialization a key pillar of Egypt’s sustainable development strategy to 2030. The timing for a cluster-based industrial development model for Egypt seems favorable as macroeconomic reforms in recent years have made Egypt’s economy more competitive and the country’s young labor force provides a comparative advantage for labor-intensive sectors. The objectives of this paper are to take stock of existing clusters in Egypt; to identify a set of promising “organic” clusters; and to make high-level recommendations for the further expansion of agribusiness and handicrafts clusters based on an innovative analysis of economic census data, a review of previous cluster studies in Egypt, and information obtained from expert interviews and a stakeholder workshop. Our findings suggest focusing cluster development efforts on Upper Egypt, which has a comparative advantage in several sectors, especially in labor-intensive sectors. However, the current cluster density in Upper Egypt is low, particularly in rural areas. Expanding the number and density of clusters there will likely require improvements in infrastructure, institutions, and services. The most promising clusters identified through the analysis include medical and aromatic plants, sugarcane, and tomatoes in the agribusiness sector; ready-made garments and carpets in the handicrafts sector, and furniture. These are all promising organic clusters based on their high market demand, export potential, labor intensity, and historical roots. We develop several recommendations for the agribusiness and the handicrafts sectors, especially highlighting the important facilitating role that local governments should play in cluster-based development by providing necessary basic public goods and services. In-depth case studies for specific, promising clusters should follow to help local governments and entrepreneurs to fully harness the unique opportunities that clusters can provide for local industrial development and job creation in Egypt.

Industry clusters promote innovation in the Arab World, through collaboration among businesses, research institutions, and governments. Benefits include the creation and sharing of knowledge, professional networking, access to spill-over knowledge, and specialized talent pools.

The Egyptian government has prioritized the idea of cluster-based development-that is, the geographic concentration of specialized firms, such as in this case, those producing similar or related products. The establishment of such clusters, however, presents significant challenges, bottlenecks, and obstacles. Based on primary field work, this paper focuses on two case studies of the impacts of shocks on business clusters. The first study involved the relocation of an established leather cluster from Cairo to a newly created industrial park, Robbiki Leather City, which was promoted by Egypt’s Ministry of Trade and Industry. Although the relocation partly solved the existing issues of water contamination, new challenges emerged relating to increased production and transportation costs, and unforeseen impacts on the community. The second study assessed the short-term impact of the COVID-19 pandemic on a business cluster producing medicinal and aromatic plants. Overall the MAPs sector was resilient to the outbreak and there are opportunities to offset any negative impacts of the pandemic by taking advantage of new markets for Egyptian MAPs stemming from supply disruptions in other countries; increased global demand for MAPs due to their pharmacological and health properties; and increased international demand for organically grown MAPs. Findings indicate that it is essential for governments to develop policy responses to the challenges-and especially barriers-to the development of business clusters, while simultaneously supporting and creating incentives for the cooperation, entrepreneurship, and collective action needed for business clusters to thrive and grow. As anticipated, challenges and obstacles-whether overarching or in response to shocks-are unique to specific sectors, contexts, and times, and hence need to be dealt with as an ongoing facilitation process.

Based on field visits, structured interviews, and reviews of the literature and secondary data, we examine major challenges facing the leather and date clusters in Tunisia. The challenges vary greatly between the clusters. The leather and footwear industry faces a decline in external demand. After the global economic crisis in the late 2000s and the Arab Spring in the early 2010s, the sector lost international competitiveness. To revitalize the sector, policies should be designed to expand markets for leather and footwear. Exploring trade agreement with the US, leveling the tariff rate for intermediate goods and shoes, attracting foreign direct investment, and improving leather quality are among potential policy options. Implementing these policies will require coordination among different government agencies and private sector stakeholders. Besides demand challenges, lack of water treatment also is a major challenge facing tanneries across Tunisia. The international demand for Tunisian dates has been very strong. Most of the major challenges are on the supply side, such as value chain coordination, inadequate water supply, labor shortages, diseases, lack of new varieties, and limited value addition. The supply-side policy options include diversifying varieties and expanding into date derivative and palm waste products, promoting labor-saving mechanization and water-saving irrigation technologies, and improving coordination along the value chain.

Africa’s unique and diverse culture, embedded in age-long business practices, presents an interesting proposition for advancing indigenous knowledge and building sustainable structures. Casebook of Indigenous Business Practices in Africa is a collection of case studies across Northern, Eastern, Central, Western and Southern Africa.

IFPRI’s flagship report reviews the major food policy issues, developments, and decisions of 2018, and considers challenges and opportunities for 2019. This year’s Global Food Policy Report highlights the urgency of rural revitalization to address a growing crisis in rural areas. Rural people around the world continue to struggle with food insecurity, persistent poverty and inequality, and environmental degradation. Policies, institutions, and investments that take advantage of new opportunities and technologies, increase access to basic services, create more and better rural jobs, foster gender equality, and restore the environment can make rural areas vibrant and healthy places to live and work. Drawing on recent findings, IFPRI researchers and other distinguished food policy experts consider critical aspects of rural revitalization.

This book examines how to promote industrial development in low-income countries. It considers the role of traders in the evolution of a cluster, the role of managerial human capital, the effect of the 'China shock', and the role of industrial policies focused on international knowledge transfer in supporting the upgrading of clusters.

Critically evaluates the prospects of achieving growth and competitiveness for small scale industry in developing countries through industrial districts.

Abstract: Egypt has a large number of handicrafts clusters, greater than any other industrial clusters in the country. Handicrafts clusters, also known as Creative or artisans' clusters, are geographic concentrations of households that produce a variety of handmade goods. Such goods include, inter alia, wood works, metal works, stones, and handmade textiles. They contribute to employment creation and poverty alleviation, especially in rural and deprived areas. The development of handicrafts clusters has been the focus of many institutions including World Bank, United Nations Industrial Development Organization (UNIDO), Micro, Small & Medium Enterprise Development Agency (MSMEDA), and Ministry of Trade & Industry; however, the overall impact of the sector in the country is inadequate. Therefore, the main purposes of this study are to: first, investigate the main barriers that hinder the development of Egyptian handicrafts clusters; second, determine this sector's key needs to thrive and grow, third, to suggest some reform policies that could be beneficial for the sector's development. In order to tackle the aforementioned objectives, fifteen semi-structured interviews have been conducted with artisans from different creative industrial clusters, as well as public officials who are in charge of developing handicrafts clusters in Egypt. The analysis illustrates several obstacles such as the absence of coordination between development organizations; the poor relevance of interventions to the sector needs; poor access to markets and business models; poor marketing skills and opportunities; low income and high vulnerability of artisans and weak regulations. The study highlights the need for an institutional body managing the sector and for accurate data about the field, and artisans' social protection among others. Therefore, a distinct way is paved for policymakers to set up sustainable solutions and mechanisms to remove these barriers to enhance the clusters' economic and social performance.

In order to complement the ongoing macroeconomic and safety net reforms in Egypt, it is important to foster additional sector-specific economic growth, especially in sectors that are good at creating jobs and reducing poverty. One sector that may help foster socioeconomic development in coming years is agriculture and related agro-processing industries. This paper shows that agriculture in Egypt continues to play a relatively important role in the economy compared to other mid-dle income countries. The sector’s stable growth performance has proved to be a reliable contributor to economy-wide output growth over the past decades. The underlying productivity gains have prevented the country’s food import depend-ency ratio from rising in spite of rapidly growing food demand.